Friday, July 12, 2013

IRS Delays FATCA Registration for Six Months!

We posted on Wednesday, July 10, 2013 "FACTA
Registration is Set To Begin in July!" which discusses
that
starting on July 15, 2013, the United States is scheduled to begin registering foreign financial firms with U.S. customers for a new anti-tax evasion law know as FATCA. Today the IRS issued Notice 2013-43, which provides Six-Month
Extension for FATCA Withholding!

This notice provides a six-month extension for when
withholding will begin (i.e., payments after June 30, 2014) and for
implementing new account opening procedures as well as related requirements to
comply with FATCA.

In the preamble to the final
regulations, Treasury and the IRS announced their intent to create a FATCA
registration website, which would serve as the primary way for FFIs to interact
with the IRS to complete the required registration, agreements, and
certifications. The preamble stated that the FATCA registration website would
be accessible to FFIs no later than July 15, 2013. After approval of its
registration, each PFFI and registered deemed-compliant FFI would be assigned a
global intermediary identification number (GIIN), which would be used both for
reporting purposes and to identify the FFI’s status to withholding agents. The
preamble provided that the IRS would electronically post the first list of
PFFIs and registered deemed-compliant FFIs (IRS FFI List) on December 2, 2013,
and would update the list on a monthly basis. To ensure inclusion on the
December 2013 IRS FFI List, FFIs would need to register by October 25, 2013.

Modification of Phased Timeline for
Implementation

Comments have indicated that certain
elements of the phased timeline for the implementation of FATCA present
practical problems for both U.S. withholding agents and FFIs.

In addition, while comments from
FFIs overwhelmingly supported the development of IGAs as a solution to the
legal conflicts that might otherwise impede compliance with FATCA and as a more
effective and efficient way to implement cross-border tax information
reporting, some comments noted that, in the short term, continued uncertainty
about whether an IGA will be in effect in a particular jurisdiction hinders the
ability of FFIs and withholding agents to complete due diligence and other
implementation procedures.

In consideration of these comments,
and to allow for a more orderly implementation of FATCA, Treasury and the IRS
intend to amend the final regulations to postpone by six months the start of
FATCA withholding, and to make corresponding adjustments to various other time
frames provided in the final regulations, as described in section III.

In addition, as described in section
IV below, Treasury and the IRS intend to provide a list of jurisdictions that
will be treated as having in effect an IGA, even though that IGA may not have
entered into force as of July 1, 2014.